The District Udhampur is relatively backward in terms of industries. There is no large scale or medium scale industries in the District. However, there is good potential for the development of textiles, irons and steel, forest based and live stock based small scale industries. After the inception of DIC programme, the industrial activities in the district has been stimulated. The small scale Industrial units have started crop up and providing the employment to local population. There were more than 3500 small scale industrial units registered with DIC Udhampur providing employment to more than 8500 persons.

At District HQ an area of 49.4 Kanals has been allotted for the Industrial Estate where in Nine small Scale Industries are functioning at present. Following are the major small scale industries setup in the district

There are about Five handloom training centers in the district where in the 55 person were trained in the handloom operation.

There are about twenty four handloom training centers in the district where in the 322 person were trained for phoolkari, staple, crewel etc.

The Khadi and Village industries are playing an important role in providing employment and increasing income in the rural areas. There are about 1500 Khadi & Village Industrial Units providing employment to about 6000 people.